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P Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Budgeted Activity Activity Supplies Patient services Building cost Activity Cost Driver Surgical hours (SH) Number of patients. Square feet The two main surgical units and their actual activity usage follow. Budgeted Cost $ 2,550,000 40,500 403,000 Service General surgery Orthopedic surgery Actual Activity Usage Surgical Hours 3,100 11,900 Patients 400 100 Square Feet 760 1,840 Usage 15,000 500 2,600 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit.

P Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Budgeted Activity Activity Supplies Patient services Building cost Activity Cost Driver Surgical hours (SH) Number of patients. Square feet The two main surgical units and their actual activity usage follow. Budgeted Cost $ 2,550,000 40,500 403,000 Service General surgery Orthopedic surgery Actual Activity Usage Surgical Hours 3,100 11,900 Patients 400 100 Square Feet 760 1,840 Usage 15,000 500 2,600 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Activity Cost Driver Surgical hours (SH) Number of patients Square feet Patient services Building cost The two main surgical units and their actual activity usage follow. Budgeted Cost $ 2,550,000 40,500 403,000 Service General surgery Orthopedic surgery Actual Activity Usage Surgical Hours 3,100 11,900 Patients 400 100 Square Feet 760 1,840 Budgeted Activity Usage 15,000 500 2,600 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit.
Transcribed Image Text:Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Activity Cost Driver Surgical hours (SH) Number of patients Square feet Patient services Building cost The two main surgical units and their actual activity usage follow. Budgeted Cost $ 2,550,000 40,500 403,000 Service General surgery Orthopedic surgery Actual Activity Usage Surgical Hours 3,100 11,900 Patients 400 100 Square Feet 760 1,840 Budgeted Activity Usage 15,000 500 2,600 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit.
1. Compute activity rates using activity-based costing. Activity Budgeted Cost Supplies Patient services Building cost General surgery 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. Supplies Patient services Building cost Orthopedic Surgery Supplies Patient services Building cost Budgeted Activity Usage -----Activity Usage----- Overhead cost per patient ---Activity Usage----- -----Activity rate----- Activity Rate ---Activity rate---- Allocated Cost Allocated Cost
Transcribed Image Text:1. Compute activity rates using activity-based costing. Activity Budgeted Cost Supplies Patient services Building cost General surgery 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. Supplies Patient services Building cost Orthopedic Surgery Supplies Patient services Building cost Budgeted Activity Usage -----Activity Usage----- Overhead cost per patient ---Activity Usage----- -----Activity rate----- Activity Rate ---Activity rate---- Allocated Cost Allocated Cost
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